In December 2023, Air Wisconsin entered into a sales-type lease for one of its aircraft that was previously treated as an operating lease since September 2022. The term of the sales-type lease is for 36 months, with monthly payments of $64 commencing in December 2023 and ending in November 2026. If the Lessee is not in default at the end of the lease term, the Lessee may purchase the aircraft for a minimal amount at that time. Air Wisconsin did not provide a residual value guarantee as part of the sales-type lease.

The Accounting Standards Update No. 2016-13, Financial Instruments- Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASC 326”) requires assessment of the net investment in the lease as of the commencement date. Based on the expected payments due under the sales-type lease, and using an implicit rate of 12.6%, Air Wisconsin determined the initial net investment in the lease to be $2,132. The Company monitors publicly available information regarding the credit-worthiness of the non-U.S. governmental agency in custody of the aircraft and the aircraft serves as collateral for the sales-type lease. Management determined that a credit loss reserve of $556 and $333 was appropriate under ASC 326 as of September 30, 2025 and December 31, 2024, respectively. The change in the credit loss reserve for the three and nine months ended September 30, 2025 of $267 and $223, respectively, reflects payments received and any changes in the publicly available credit-worthiness of the non-U.S. governmental agency in custody of the aircraft. Management also added $18 and $19 of interest accrued to the carrying value of the sales lease receivable under the sales-type lease as of September 30, 2025 and December 31, 2024, respectively. The net sales lease receivable was $1,214 and $1,530 as of September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, the net investment in the lease, net of the credit loss reserves, are labeled as Sales lease receivable, net in the consolidated balance sheets as $401 and $470, respectively, which reflects the amount expected to be received over the next one-year period, and $813 and $1,060, respectively, for Long-term sales receivable, net, which reflects the remaining amounts to be collected over the remaining term of the lease as of the respective dates of the consolidated balance sheets. For the three and nine months ended September 30, 2025, the Company recorded $54 and $165, respectively, of interest income from the lease, compared to $63 and $196 for the three and nine months ended September 30, 2024, respectively. The interest income is recorded in Interest and dividend income in the consolidated statements of operations.